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Energy

“It is becoming more economically advantageous for people across the country to use renewable resources,” states Chris Gottfried, Gannett Peak Energy president (GPE).

Wyoming is known for its natural resources, like coal and gas, but alternative energy sources are fast becoming a part of the landscape.

“There’s a big opportunity for alternative energy and renewable resources in agribusinesses and rural communities, especially in Wyoming,” Gottfried says.

According to Gottfried, costs to manufacture and install alternative energy equipment are decreasing, along with energy output costs.

He believes alternative energy is even more useful for rural customers who live in remote areas because self-sustainability is available through this technology.

“Farmers, ranchers and people in agribusiness take great pride in using land cost-effectively, and using renewable resources to power their operations goes hand-in-hand with that idea,” says Gottfried.

Applications

Depending on the size of property, GPE products have a power level of five to 10 kilowatts (kw), which can power up to five buildings or homes, says Gottfried.

“Farmers and ranchers can use GPE turbines to power entire operations with a single 10 kw turbine,” he adds.

Larger operations sometimes use alternative energy sources for power in particular areas, like a cattle facility, while the rest of the operation is powered with traditional power sources, states Gottfried.

“Small wind turbines are a very renewable solution for small scale applications, which is beneficial for farms, ranches and rural areas,” he comments, adding, even churches are looking into alternative power sources.

Farmer and ranchers can also use solar panels to run pumps in stock wells, which reduces the need for expensive transmission lines, says Shawn Taylor, Wyoming Rural Electric Association executive director.

“Small wind chargers can be put on houses or buildings to provide renewable energy,” he adds.

Taylor mentions, in Wyoming, there is a net metering law, which allows anyone to install up to 25 kw of solar panels or wind charger on a residence.

“When the wind is blowing and the sun is shining, but electricity isn’t being used, the power generated goes back into the grid and offsets electrical use,” explains Taylor.

Alternative energy benefits

Gottfried believes two advantages of alternative energy are economic benefits and social impacts.

“Economic benefit is the main driver for people to switch to renewable energy sources,” he notes, adding, “The social impacts for rural customers and agribusinesses include enabling consumers to be more self-sufficient.”

Alternative energy and renewable resources are becoming more prominent across the U.S. because farmers and ranchers are seeing economic benefits, as well.

“As technology has improved and as renewable energy infrastructure has developed further, it makes sense for people to invest in this type of technology,” Gottfried adds.

Producers typically breakeven on their investment in eight to 10 years, even when they remain on-grid and choose to only augment their energy consumption with alternative sources.

“In the end, the investment and switch to alternative energy works out because smaller turbines have limited upkeep and maintenance costs,” says Gottfried.

Also, environmentally, wind and solar energy sources produce zero emissions when generating electricity, says Taylor.

“Another benefit for ranchers or farmers comes from royalties from big wind farms who want to put wind turbines on producer’s property. The turbines don’t take up much farm or rangeland either,” he adds.

Problems

Alternative energy still has some issues, which can cause problems for those in the agriculture community, notes Taylor.

“Turbines may bother neighbors next to large wind farms, especially if those neighbors don’t receive financial benefits,” he explains.

Taylor also mentions, while wind and solar do offer zero emissions, the materials for the turbines, solar panels and technical components do have carbon footprints, leading him to believe those who promote the environmental aspects of solar and wind energy don’t always tell the whole story.

According to Taylor, wind and solar energy sources are intermittent because the sun doesn’t always shine and the wind doesn’t always blow.

“Wyoming has good wind and solar resources, but a big enough wind or solar farm can’t be built to meet energy need, like coal can,” he adds. “People want their pivots to turn when they’re supposed to, and they want reliable electricity.”

Also, turbines are available for producers to install on their operations, but they can be a very expensive in terms of upfront cost.

Improvement

At the industry level, according to Gottfried, alternative energy is a growing opportunity, which comes with challenges.

“The cost of purchasing and installing even smaller wind turbines is understandably a large amount of money. Getting over that hurdle and getting cash outflow is a major challenge,” he adds.

In Wyoming, oil and gas are the main focus, but diversifying the energy industry will require effort to overcome challenges.

“Gov. Matt Mead has set a pretty positive direction for diversifying Wyoming’s economy, but to continue, workforce development and investments in technology need to be made. There are some great opportunities in Wyoming,” notes Gottfried.

While natural resources may be plentiful in Wyoming, Gottfried sees an opportunity for the economy to augment oil and gas with renewable energy sources.

Heather Loraas is assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

Casper – Mark Snead, president of RegionTrack, Inc. of Yukon, Okla., categorized Wyoming as the state of mining, moose and migration.

With much of the country seeing recovery following the economic recession, Snead said, “We are back to pre-recession patterns, so where does Wyoming fit into this? What is the key driver?”

Snead spoke with attendees of the 2014 Agricultural Bankers Conference, held in Casper on May 15-16.

Reasons

“When we look at the patterns a little more broadly, we see steady growth rates in retail sales through 2009-10,” he explained. “In early 2012, retail sales flattened, and we had soft data in 2012. By and large, retail sales were flat year over year.”

Taking a broad perspective and looking at large sectors, Snead said the goods sector overall has weakened.

“Construction, mining, agriculture and manufacturing have all weakened, and the government sector has been particularly weak under budget constraints,” he said, marking local governments as the weakest area. “The growth has been in services.”

Locations

Snead also looked at Wyoming’s two major metro areas – Casper and Cheyenne – noting that they tend to lead the state in terms of economic trends. 

“Softening was first visible in the job growth numbers in Casper,” he commented. “By the end of 2012, we saw some clear softening. Both of the major metro areas were soft in the fourth quarter of 2012 and first quarter of 2013. It doesn’t really matter what the rest of the state is doing when the two metro areas are soft in both the first and fourth quarters.”

Current state

“It would be nice to bounce out of the recession, but I would argue a clear downshift has showed up in the rural areas first and the metropolitan areas last,” Snead commented. “Wyoming, at the moment, is operating below its historical level.”

He added that determining economic activity can be difficult and is somewhat dependent on the sector being analyzed, but overall trends can still be noticed. 

“It is hard to get behind the wheel and gauge economic activity, and to some degree, it is specific to the industry,” he said, “but nonetheless, Wyoming has cooled.”

Mining sector

One of Wyoming’s major sectors for economic growth and development is the mining sector, which is broken into mining support, mining except oil and gas, and oil and gas extraction.

“Mining support is the biggest sector,” Snead said. “Wyoming has about 12,000 jobs in the mining support sector.”

The sector has driven the slowdown in the mining sector, with visibly slowed growth in 2012. 

“We also see some softness in mining except oil and gas,” he said, noting that the sector includes coal, uranium and other extracted minerals. “This is certainly not the problem.”

The third portion – oil and gas extraction – includes drilling and white collar activities and has stayed fairly flat.

“It is the support activities that are the problem for the mining sector,” said Snead. “Wyoming is clearly still highly mining-dependent, and the mining sector is the problem for Wyoming.”

Bigger picture

In the energy sector on a national scale, Wyoming sits high in natural gas production but drops for oil production.

“The U.S. produces about 26 trillion cubic feet of natural gas,” said Snead. “Texas produced 8 trillion by itself, and the second tier, Wyoming, Oklahoma, New Mexico and Louisiana, jointly produce about the same as Texas.”

However, growth for Wyoming is limited, due to the dry natural gas that is prevalent in the state. 

“Wyoming’s gas is not liquid-rich, especially when compared to other states,” he explained. “Profit models are based on the liquid mix. On the gas side, Wyoming is just particularly less competitive than many of the other energy hubs.” 

However, with stronger gas prices, Wyoming may re-enter the industry. 

Crude and coal

When looking at crude oil and coal, Snead also marked some challenges.

“When we look at the crude side, we are pushing 3 billion barrels of production in the U.S.,” he explained. “Wyoming is clearly in the third tier of oil producers because the state hasn’t seen the spike that Oklahoma, North Dakota, Texas and New Mexico had.”

Based on Wyoming’s geology, Snead said the state is not poised to become a huge player in the crude oil game nationwide.

“Coal is also a tough one,” he commented. “We are modeling Wyoming as having a permanent long-run slow down trend in coal production. The data is telling me that, until we do something on the regulatory or carbon reduction front, this is what we will see.”

International coal shipment also poses a problem with lack of access to seaports on the West Coast.

An additional challenge with coal is that much of Wyoming’s coal extraction takes place on federal land, which is getting more challenging to navigate.

Despite the challenges, Snead sees opportunities for Wyoming as a hub. 

“Casper is doing well within Wyoming, which is doing well as a hub,” he said. 

Agriculture industry

Snead, however, also noted that a shift is also seen in agriculture.

“The data in our world has shifted from overwhelmingly positive fundamentals to a steady decline in what we would argue is a clearly deteriorating, though not bad, set of fundamentals,” he said.

With crop prices down, rental rates down, softer ag rental rates and softened repayment rates, Snead said a shift in conditions has occurred in the ag industry.

Across the state

Snead said that across much of Wyoming, job creation matches population growth, with the excpetion of Campbell and Carbon Counties.

“In Carbon County, we are seeing very strong job growth, yet population decline,” he said. “In Campbell county, we have the reverse of Carbon County. We have strong population growth, but a net decline in jobs.”

Most of Wyoming’s new population is moving into Teton, Natrona and Laramie counties. 

In Casper and Cheyenne, Snead commented that some growth is occurring.

“Casper is moving forward as an energy hub,” he said. “Casper is growing rapidly.”

The city posted 2.7 percent job growth in 2013 – a higher rate than on the national level.

“Casper is also moving up the ranking in energy markets,” Snead added.

However, Cheyenne is also growing, but Snead said it is only marginally sensitive to the energy sector.

“Cheyenne is really taking on a different personality,” he commented. “Federal employment is something of a concern for Cheyenne with the air force base.”

“In terms of statewide performance, until the cutbacks in the mining sector and government sector pick up, Wyoming won’t see large growth rates,” Snead mentioned. 

However, he also said that since 1965, the 13 energy states in the nation far outperform the rest of the nation in terms of job growth. 

“Wyoming is 100 percent a traditional energy state, and it is good to be an energy state in the long run,” Snead noted. “The problem is the volatility along the way.”

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..


SIDEBAR 1:
Wyoming past

Looking back to the 1990s, Region Track, Inc.’s Mark Snead noted that Wyoming had one of the best economies in the country. 

“In 1991-93, when most states were having a hard time getting traction, Wyoming was doing extremely well,” he explained. “By 2003-04, the natural gas world exploded.”

During the recession, Snead said that Wyoming struggled.

“In early 2010, Wyoming was moving something below the two percent pace that showed the nation was struggling to create jobs,” he said. “While Wyoming came out of the recession at near two percent job growth – much faster than the rest of the nation, in early 2012, the state downshifted to one percent.”

Currently, job creation is at approximately one percent, a figure that tracks below the historical rate and significantly below 2003-08’s explosive rates.


SIDEBAR 2:
U.S. overview

At the national level, Mark Snead of Region Track, Inc. noted that pre-recession trends are returning across the country. 

“Some of the country obviously has lower unemployment rates, but the coasts have once again accelerated rapidly in terms of job growth,” he said. “We now have the traditional patterns from prior to the recession.”

Included among those patterns in the desire to live within 100 miles of the coast, and the result is that the traditionally high-end migration, fast growth states are creating the bulk of jobs. 

Broadly, those high-end migration states include the coastal rims – including California, Washington, Oregon, Texas, Florida, Georgia, South Carolina, North Carolina and Virginia.

Energy and agriculture states led post-recession recovery in the U.S., but those states saw a dramatic slowdown in 2012-13. 

“We also have the rural versus metro imbalance,” Snead said. “The metro areas are growing faster than rural areas. We can see that in Wyoming, just as it is playing out in other states.”

USDA Rural Development has financial assistance through grants for agricultural producers and rural small businesses to purchase and install renewable energy systems and energy efficient improvement projects. 

The grants are through the Rural Energy for America Program (REAP) and can cover up to 25 percent of a project’s cost for energy improvement.

“REAP is to help agricultural producers and small rural businesses make improvements for saving energy and to upgrade to more energy efficient programs,” says Debra Anderson, Sheridan’s Rural Development area specialist for REAP.

Anderson adds, “This allows for producers to pursue other avenues available for energy efficiency, rather than depending on standard practices.”

There are three components to the program, and they are the renewable energy system and energy efficiency improvement guaranteed loan and grant program, energy audit and renewable energy development assistance grant program, and the feasibility studies grant program. 

History

REAP grants stem from the Renewable Energy System (RES) and Energy Efficiency Improvement (EEI) program of the Farm Security and Rural Investment Act of 2002. 

REAP has been helping agricultural producers and rural small businesses since it first began operation in 2005. 

As part of his “Win the Future” plan, President Obama called for 80 percent of America’s electricity to come from clean sources by 2035 – including wind, solar, nuclear, clean coal and natural gas.  

Secretary of Agriculture Tom Vilsack has also helped by implementing cooperative programs and incorporating rural businesses to have a wide array of programs that will help attain the president’s energy goal. 

Criteria

All applicants must be U.S. citizens or legal residents, and eligible agricultural producers must obtain at least 50 percent of their gross income from agricultural production. 

Qualified businesses must be in areas populated with 50,000 or less, employ 500 or fewer employees and gross $20 million or less in annual receipts.

Approved projects in the past for renewable energy have been for bio-energy, flexible fuel pumps, anaerobic digesters, geothermal, hydropower and small and large solar and wind projects. 

“There is also an energy efficiency side of the program, and that side includes improvements that need to be verified by either an energy audit or assessment,” explains Anderson. 

Energy efficiency improvements are improvements to a facility or process that reduce energy consumption. An energy audit would be conducted if the project’s cost exceeds $50,000. 

Project eligibility

The project must be for the purchase of a renewable energy system or make energy efficient improvements. The technology used for the projects needs to be replicable and available commercially. 

Applicants for REAP funding must be the owners of the project and have control of all the revenues, expenses, operation and maintenance of the project. A third-party under contract may be used to assist the owner during the project. 

Sufficient funds to allow the operation to be completed must be met, and debt service of the project has to be available. 

Grant funding

REAP grants will not exceed 25 percent of the total eligible project costs, and the grant applicant is responsible for and must secure the remainder of the project expense. 

For the renewable energy systems component, the range of grant funding is a minimum of $2,500 to a maximum of $500,000. 

Allotted grant money for the energy efficiency improvements is half of that for the renewable – with a minimum of $1,500 and a maximum of $250,000. 

“We always need more applicants,” comments Anderson. “We would like to see some of these funds go into our communities and see some of these projects happen in our constituency.” 

Eligible project costs covered by the REAP grants are post-application purchase and installation of equipment, post-application construction, improvements or retrofitting, energy audits or assessments, permit and license fees, feasibility studies and technical reports and business plans. 

Costs not covered by the REAP grants are agricultural tillage equipment, used equipment, vehicles and application preparation.

Applications

When determining the amount of a REAP grant, USDA Rural Development takes into consideration several different aspects of the project. 

Aspects such as the type of renewable energy system to be purchased, estimated quantity of energy to be generated by the renewable energy system and the expected environmental benefits of the renewable energy system are also considered.

Other criteria the grant application looks for are the amount of energy savings expected to be derived from the activity and the estimated length of time it would take for the energy savings generated by the activity to equal the cost of the activity. 

Madeline Robinson is the assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

As energy development continues across Wyoming, energy companies are continually working to fulfill off-site mitigation requirements. In the Upper Green River Basin of southwestern Wyoming, new opportunities for companies to meet those requirements are emerging with the development of the Upper Green River Conservation Exchange.

“Our idea was to create a marketplace for environmental services where energy companies could pay landowners to implement best management practices on their land,” explains Kristi Hansen of the University of Wyoming. “In exchange, energy companies would receive credits for offsite mitigation. Such an exchange could also involve other investors interested in supporting conservation, not just energy companies.”

Because of the unique nature of the Upper Green River Basin in its environmental qualities, recreation amenities, wildlife habitat and riparian areas, as well as the increasing amount of oil and gas exploration, Hansen notes that the area is ideal for a conservation exchange. 

Conservation marketplace

Just over a year ago, groups in the Upper Green River Basin came together to begin officially developing a program.

“Discussions to get something underway in the environmental service marketplace started among landowners a number of years ago,” explains Hansen. “The Sublette County Conservation District (SCCD) got involved with the University of Wyoming and The Nature Conservancy (TNC) to scope the feasibility of setting up a marketplace to make these transfers happen.”

The result of these numerous discussions was the Upper Green River Conservation Exchange.

In developing the Upper Green River Conservation Exchange, Hansen says they are working towards the establishment of a market where multiple buyers will be able to find sellers involved in implementing conservation strategies on the ground to maintain and/or enhance environmental conditions.

“The Environmental Defense Fund is involved in setting up markets along these lines across the western U.S.,” she adds, “so we are able to utilize their expertise to help us set up a program with benefits for energy companies , other potential funders and landowners.”

UW, SCCD and TNC have obtained a grant from the Wyoming Natural Resources Conservation Service (NRCS) to scope the feasibility of a market.

“In the context of that grant, we are implementing four transactions to help us explore how the markets might work,” Hansen comments. “We also have several landowners involved in the discussion and formation of the program.”

On the ground

As part of initial efforts, Hansen notes that developing relationships with stakeholders has been incredibly important to develop the program.

“We have done a lot of ground work in terms of talking to landowners and potential buyers like energy companies,” she continues. “We have talked to federal and state land management agency representatives, as well.”

“Landowners are very important stakeholders in this effort,” she adds.

Hansen also mentions, “We really want to make sure that what we set up moving forward meets the needs of potential buyers and sellers and is satisfactory to all the agencies that have an interest or responsibility to manage the land.”

Program development

“Right now, the program is in its infancy,” she says. “We are hoping to begin more pilot transactions this summer to see what the market might look like.”

In getting pilot transactions underway, Hansen explains that there are a number of different possibilities for how the market will look and function, and they are looking at several options.

“In the long run, we’d like to see a market with multiple buyers and sellers develop,” Hansen continues. 

While energy companies may be the most likely initial buyers, all kinds of other buyers, from individuals to non-profit groups, could ultimately be buyers seeking to encourage conservation practices, Hansen said. 

“One of the important aspects of what we are doing is developing the metrics for translating what happens on the ground into outcomes where we can track values for wildlife habitat and riparian function; and that provide accountability, certainty and flexibility  for both buyers and ranchers, while enhancing stewardship for wildlife habitat and riparian function,” she adds.

The metric would basically help to quantify best management practices and conservation efforts. A science team is actively working to develop the metric.

Work with land management agencies is also important in developing the project, says Hansen, who notes that the group developing the Upper Green River Conservation Exchange is also looking at how to incorporate regulatory assurances.

“We are following the development of the sage grouse Candidate Conservation Agreement with Assurances at the state level,” Hansen says. “The project is intended to help energy companies and land owners to comply with current and future regulations”

Mutual benefits

The Upper Green River Conservation Exchange is being developed with both benefits for landowners and energy companies in mind.

“Our intention is that the program will help energy companies fulfill their offsite mitigation requirements,” Hansen says. “We really have an emphasis on making sure that conservation is achieved, and the science is there.”

Additionally, she notes that energy companies who participate in the program will know that their money is well spent in achieving measurable conservation on the ground.

“In terms of the landowners,” she explains, “participating in this program provides them with the potential for an additional revenue stream.”

“Ultimately, we are working toward the goal of having a conservation exchange as one way energy companies can help meeting their requirements while achieving conservation,” says Hansen.

Landowners interested in getting involved in the Upper Green River Conservation Exchange should contact Melanie Purcell of the Sublette County Conservation District at This email address is being protected from spambots. You need JavaScript enabled to view it. or 307-367-2257.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

 
Laramie – The role that energy plays in agriculture is growing, commented professional engineer James Fischer at the 2012 AgriFuture Conference in Laramie on Oct. 16-18, who added, “We should be fishing for a sustainable supply of energy, or we could have a whale of a problem.”
    “We have an energy situation that we ought to be concerned with,” said Fischer. “I am not one to come to Wyoming and tell you not to get all the natural gas you can or to not use your coal, I’m saying there are only so many dead dinosaurs. If we keep using our fossil fuels at the rate we are on a global basis, we are going to be limited.”
World energy consumption
    “Unless we do something to figure out how we are going to move forward, there are going to be conflicts,” Fischer said.
    He also added that links behind energy consumption and affluence will begin to appear.
    “The higher energy consumption results in higher GDP, which translates to quality of life,” he explained. “All countries want to move up, but if they get there the same way we did – using a lot of fossil fuel – we are going to limit our supply even quicker.”
    In developing as a nation, the United States underwent a huge industrial revolution, which utilized massive quantities of fossil fuels. The availability of such fuels limits developing countries’ abilities to utilize the same strategies the U.S. did in growing.
    Fischer also noted that in developed countries, energy consumption has leveled, while developing countries are seeing increases in energy use.
What’s at stake?
    “The best case scenario is that in the future we have a number of technologies that allows us to transition from heavy reliance on petroleum to relying more on domestic and renewable resources,” Fischer comments. “All fossil fuels will be in our future – it is how we manage them now that determines what will happen later.”
    In the worst case scenario, Fischer says that fossil fuels will continually be used at high levels and no further research will be done toward renewable, in which case, a supply disruption could happen.
    “We would be buffered by the strategic petroleum reserve, in that case,” he explained, “but the reserve is 4.1 billion barrels. We use about 19 million barrels each day. Is a seven month supply sufficient?”
    Fischer also questioned what marks a trigger for when the reserves should be utilized.
    “The triggering point should be for our national defense, in my mind,” he said. “It shouldn’t happen just because gas prices are going up.”
How much time?
    While some programs are currently in place, Fischer questioned if they will be soon enough.
    “The United Nations has a program called SE4ALL,” he explained. “Their goal is to ensure universal access to modern energy by 2030. Right now, 1.3 billion people don’t have access to electricity, 1 billion only have intermittent access and 2.8 billion don’t have access to clean cooking. That is a lot of people to give energy to.”
    Fischer continued, “We need to double the rate of improvement in energy efficiency and double the energy efficiency itself.”
    For people in the U.S., he asked, how much time do we have?
    It takes 15 years for the U.S. to change the fleet of cars in the U.S., said Fischer, noting that even if the technology is available today, it will take 15 years for all the cars to turn over to the high efficiency rate. Appliances take 10 to 20 years to change, and buildings take 80 years.
    “There is no silver bullet. I suggest silver buckshot,” Fischer said. “We need to increase renewable energy supplies, reduce demand and increase efficiency, and we will still need fossil fuels.”
Solutions
    With a number of tasks to take on to increase energy availability, Fischer commented that the first goal should be raising the corporate average fuel economy.
    “We can have the best climate impact and increased energy security by raising fuel economy,” Fischer said. “The worst thing we can do is to let them stand where they are.”
    He also added that current uncertainty in energy policy is a disincentive for businesses to get involved.
    “I can build a business if I know the policy, but I can’t build business on uncertainty,” Fischer noted. “We have to put something together that makes sense.”
Ag and energy nexus
    He continued to note that the increasing role of agriculture in the energy industry can also help to increase energy independence and efficiencies.
    “If we rely on agriculture and energy, at one time, we will need energy in agriculture,” he said. “Ag will supply the energy and become more efficient, using less energy.”
    Production agriculture utilizes about 21 percent of the energy in the U.S., which amounts to about 10.25 quadrillion British thermal units (BTUs).
    “We use more energy in the home for refrigeration and preparation than we do in the field,” Fischer commented, noting that 31 percent of food system energy use comes from those sources.
    While there are a number of efforts that would be necessary to continue to achieve sustainable energy, Fischer noted that some successes have been seen already.
    “America was importing less oil in 2012 than it was in 2008, and we are drilling more,” Fischer said. “We have seen significant changes.”
    “Achieving sustainable energy isn’t an easy job,” Fischer added, “but we have to be successful.”
    Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..